- Pulp prices broadly stable: NOREXECO pulp futures for 23E imply a 12-18% decline in Europe, while prices in China are expected to decline by 2-6%. In North America, Verso and Eldorado are out with a USD 40/t price increase for BHK in February and softwood producers are targeting a USD 65/t increase. UPM postpones start-up of its new 2.1mpta BEK pulp mill in Uruguay from H2 22E to Q1 23E. This is on the back of tight global supply chains, driving a 10% increase in the project cost (to USD 3.47bn), with a cash cost of USD 280/t delivered (unchanged). Following CMPC’s Q4 21A results, the Chilean pulp and paper producer believes there will be further positive momentum for pulp prices globally in 2022 on the back of continued supply shocks (logistics, UPM strikes, UPM project delay) and improved demand in China and continued strong demand in Europe.
- Graphic Paper in the green: Newsprint was up a further staggering 10% w/w (+20% in two weeks), reaching record highs on the back of tight supply and rising gas prices. After factoring in a 30% discount to list pulp prices, the CWF/HW spread improves to EUR 133/t (UWF margin EUR 309t). Perlen Papier is targeting an EUR 80/t increase for CM from February and Lecta is out with an 8-15% price increase on specialty papers due to continue cost pressures.
- European containerboard prices remain steady: Ilim Group is set to start up its new kraftliner PM (600ktpa) at Ust-Ilimsk in H2 2022. In North America, containerboard producers are out with a USD 70/t price increase, which appears to be more cost driven than on the back of supply/demand fundamentals.
- Sack kraft market remains tight, with January prices for unbleached up EUR 400/t y/y & EUR 250/t for bleached: This is on the back of sustained demand and supply disruptions due to strikes at UPM (impacting BillerudKorsnäs’ unbleached sack kraft production) as well as production issues at Segezha.
- North American boxboard price increase full steam ahead for February: SBS prices moved up USD 50/ton in January, reflecting implementation of an increase that was effective in December. SBS published prices are now up USD 300/t since early 2021 and into 2022.
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